The overall price trend of soda ash in the second half of 2024 is not optimistic, and the centre of gravity of the price is expected to oscillate downward, the following is the specific analysis:
Supply pressure continues to increase:
Capacity expansion: In 2024, the capacity expansion of the soda ash industry was obvious, with 1.3 million tonnes of new capacity in the first half of the year, and 2.3 million tonnes of new capacity planned for the second half of the year, with an annual capacity growth rate of about 9%. The continuous release of new production capacity has led to a significant increase in market supply, far exceeding the growth rate of demand, resulting in market oversupply and bringing great downward pressure on prices.
Limited impact of unit maintenance: Although soda ash units in the July-September high temperature season more concentrated maintenance, but 2024 maintenance is relatively decentralised, and part of the new units put into operation to offset the reduction in supply brought about by maintenance, the market support role is relatively limited.
Downstream demand support is weak:
Weak demand for float glass: float glass is one of the main downstream demand for soda ash, but in 2024 the float glass market performed poorly, the demand side of the terminal project orders shrinking significantly, the demand declined. In the second half of the year, although there are favourable real estate policies, the average profit of the industry has rebounded, but the completion area of real estate is still on a downward trend, and the melting volume of float glass in production is declining, and the demand for alkali is relatively low, which makes it difficult to form a strong support for the price of soda ash.
Photovoltaic glass demand decline: photovoltaic glass industry is also facing difficulties, affected by overcapacity, the domestic photovoltaic industry chain is in trouble, silicon, glass, components are forced to reduce production. Three quarter photovoltaic glass melting capacity fell nearly 18,000t / d, the fourth quarter inventory hit a new high, part of the production line was forced to cold repair, the new production capacity is also more limited, with the alkali demand is difficult to increase for the time being.
Light alkali downstream demand without obvious promotion: light alkali downstream of daily-use glass, inorganic salt and other industries start load change is not big, part of the industry also exists the characteristics of the peak season is not prosperous, profitability is not good, on the soda ash purchasing motivation declined, adhere to the purchase on demand, the demand is difficult to have a significant increase.
The trend of high inventory accumulation has not changed: as of 15 November 2024, the inventory of domestic soda ash producers was 1.65 million tonnes, an increase of 0.68 million tonnes from the end of June, an increase of 1.31 million tonnes from the beginning of the year, and an increase of 1.2 million tonnes from the same period last year. And the accumulation trend did not stop, the current demand for soda ash is weak, no exit plan for production capacity, it is expected that during the year and the first half of 2025, it is difficult to see the industry inventory effective decontamination, high inventory on the soda ash price to form a sustained suppression.
Cost factor is difficult to change the price trend: although some enterprises due to high cost in the process of price decline in the loss and take the initiative to reduce production, but due to the different process of soda ash enterprise cost difference, ammonia alkali cost is higher than soda ash, soda ash cost is higher than natural alkali, in the current price, natural alkali enterprises and most of the soda ash enterprises still have profits, it is difficult to form a unified industry-wide production reduction, so the cost factor on the price of support is limited, and it is difficult to promote a sharp price rebound. Therefore, the cost factor is limited to support the price, and it is difficult to push the price to rebound sharply.
Post time: Dec-07-2024